CTV demands regulation rethink with ‘A’ station layoffs

In the wake of CTVglobemedia Inc.’s payroll purge across its “A” TV stations earlier this month, some people now wonder if the layoffs were as much a political ploy as an economic necessity. Bob Smith, former a.m. news anchor at A London – one of the stations affected by the cuts – figures parent company CTV wanted to send a message to the CRTC: we had to cut because you wouldn’t let us charge cable and satellite companies a fee to carry our signals; reconsider your decision. “When the carriage fees were turned down, I think the wheels were turning on that day at the broadcasters – we’re not making any money on these properties, so let's show them how serious we are,” Smith says. “I suspect it's a combination of economics and politics.” David Goldstein, senior VP, regulatory affairs at CTVglobemedia, says the decision was financial. The economic downturn, which has decimated TV ad revenues, coupled with no fees for carriage made the A stations even less profitable. “For years now, these have been money-losing stations,” he says, adding that CTV has also made cuts in Toronto. “This was an economic decision, and not one made in isolation.” On March 3, CTV announced it would lay off 118 people from its A stations in Victoria, B.C., and London, Barrie, and Ottawa, ON. The morning programs in Victoria, London and Barrie were cancelled. In Ottawa, the 6 p.m., 11 p.m. and weekend news shows were cancelled. The cuts represent about 28% of the A station staff count, according to a CTV press statement. “These are extremely difficult and challenging decisions to make given it’s not about the quality of our A programming or that we have achieved double-digit audience growth,” the CTV press statement quotes Paul Sparkes, executive VP, corporate affairs. “We simply can’t monetize our success. We are doing everything we can to hang on to conventional television, but as we continue to stress, the conventional model is now broken. In the long term, the only real solution is fee for carriage.” CTV isn’t the only organization suggesting the CRTC should allow fees for carriage. The Communications, Energy and Paperworkers Union of Canada (CEP) also points a finger at the commission. “It is clear the CRTC made a devastating mistake in not helping the conventional broadcasters with money from the cash-rich cable companies,” says Peter Murdoch, VP, media. Canadian broadcasters have been lobbying the CRTC for a carriage fee, but last October the commission said it would not allow companies like CTV to charge cable and satellite companies for distributing its content. In Broadcasting Public Notice 2008-100, the regulator said it was not convinced of a permanent decline in profitability among over-the-air (OTA) broadcasters, consumer acceptance was an issue, and subscriber uptake would be affected. “In the absence of reliable and persuasive data, the commission was not convinced that the introduction of an FFC (fee for carriage) would result in a net benefit to the broadcasting system,” the decision reads. But now that CTV has laid off so many people, should the commission change its stance? BCE Inc., parent company of satellite TV service provider Bell TV, argued against fees for carriage before the layoffs. Today, its position is no different. “The CRTC has twice ruled against imposing fee for carriage, for good reason,” the company said in an email. “There has been no evidence that it’s the absence of FFC that has led to the various broadcaster steps.” Rogers Communications Inc. also argued against carriage fees, and “that’s still our position,” says Jan Innes, VP, communications. She notes that OTA broadcasters already get priority channel placements and simultaneous substitutions from Rogers Cable, giving the broadcasters a healthy leg up. The state of the economy may well hamper broadcasters’ revenue efforts, but “fees for carriage are not going to solve the problems,” she says. The CRTC wasn’t available for an interview; however, the commission pointed to chairman Konrad von Finckenstein’s speech before the Canadian Film and Television Production Association’s “Prime Time Ottawa” conference in February. “In the past, conventional broadcasters asked to be allowed to charge a fee-for-carriage,” he said. “While we turned down this request...we are not blind to the plight of conventional TV.” He outlined a new framework for broadcast licence renewals, to address the problem. This was the CRTC’s follow-up to its January statement, wherein the commission said it would narrow the scope of broadcast licence hearings. Beginning with the renewal hearings scheduled to begin on April 27, the process will now be divided into three phases covering issues such as shorter-term licences (one year instead of seven years) and broadcaster ownership structures, which have evolved over time, von Finkenstein said. The TV audience is changing, he said. OTA broadcasts are becoming less popular, while specialty and pay channels, video on demand, and other new services take over. “The sideshow is rapidly becoming the main attraction. The former primacy and prosperity of the conventional system allowed it to carry out its regulatory obligations such as investment in Canadian drama and in local programming. Now it is still obliged to bear the greatest burden of those responsibilities even as its competitors run away with large chunks of its audience.” Smith from London agrees that the media landscape is different now than it was when he began his broadcast career in 1975. The Web has become a strong contender for people’s attention. And although many TV stations have Web sites, they feature little more than content broadcast on the air the night before. “It’s not what you’d expect in 2009,” Smith says. What will he do now? Smith plans to continue to teach at Fanshawe College, where he’s a broadcast instructor. And although he thinks the industry is changing, certain facets of the media will always be important. “I keep telling students, don’t fear for the future. The platform may change, but people still want to know what’s going on down the street.”

CTV demands regulation rethink with ‘A’ station layoffs

News | 03/10/2009 8:30 pm EDT

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